Bim Afolami: The politics of Net Zero are more perilous than we think

14 Jun

Bim Afolami is MP for Hitchen & Harpenden.

I was in the chamber of the House of Commons when Theresa May’s government legislated for a legally binding target for the UK to reach Net Zero by 2050.

It felt momentous at the time, and it was a big moment. Strangely, though, during the debate in the chamber, the remarks were uniformly positive, from all sides.

Now let me be clear: I strongly support the Net Zero target and did at that time – it is the right thing to do. But in politics when you see something as momentous as this go through without a dissenting voice, an alarm bell should ring that says: “have we thought through all the implications of this?”

There are two areas where we may be politically vulnerable in the coming years on the environment, and on reaching Net Zero by 2050 in particular.

First, the need to significantly limit, and preferably nullify, any direct economic cost on working people, or else risk a considerable political backlash. With the threat of inflation rising, the cost of living agenda is likely to return to the front and centre of British politics very soon. This will be politically resonant for the sort of middle income, Red Wall voters who have been increasingly supporting the Conservatives in recent elections.

Second, there is the twin threat from the other side of our political coalition. For many liberal-minded, Remain-leaning Tory voters in the south, our strong support for the environment is one of the key reasons for their support. If there is any hint that we are rowing back, their loyalty will be severely tested – especially if Labour and other opposition parties can effectively make the case that we are failing to reach our own carbon emission targets.

Our record on reducing UK carbon emissions whilst growing our economy is the best in the G7, and one of the best in Europe. Yet the vast majority of actions we have taken are about decarbonising power generation. Aggressively moving towards renewable energy since 2010 has been remarkably successful, but we have barely begun to tackle many of the aspects that affect people’s day to day lives – for example, the need to retrofit homes in order to make them more fuel efficient, ensuring traditional boilers are replaced, or ensuring electric vehicles are affordable to the ordinary family.

To be frank, these actions will require a lot of money, up front, from the Treasury. We cannot think it will be sufficient to cover the costs just for the lowest income voters – most voters will need environmentally sustainable options to be heavily subsided and affordable. Most middle income or even wealthier voters are not remotely prepared or willing to pay significantly more tax on fuel, or on flights, or to rip out their existing heating systems, or many other invasive things that academics and policy experts suggest will soon be required to reach Net Zero.

The Committee on Climate Change envisage phasing out oil and coal heating by 2028, gas boilers in homes by 2033 at latest, and by 2030 in public buildings. Lots of change is coming. The new upcoming Heat and Buildings Strategy and broader Net Zero strategy (both expected this summer) will be scrutinised heavily on the twin axes of both policy effectiveness and additional costs.

The cost of living used to be a major issue in our politics. It was a dominant issue during the 1960s, 1970s, and 1980s. The 1990s and 2000s saw benign economic circumstances until the financial crisis.

After it, something strange happened to our economic debates. We stopped talking about economic policy in relation to ordinary people – real incomes, prices of goods and taxes, and focused our political capital on getting public support for measures to reduce the deficit. Although May’s government started to home in on cost of living as a potential issue for the “JAMs” (voters “just about managing”), this issue was soon subsumed within the Brexit fog.

I believe that that the politics of cost of living is about to return, and it presents a real political danger for the Government and the Conservative Party.

Andy Haldane, the hugely respected former Chief Economist of the Bank of England, has openly talked about the “tiger” of inflation stalking the land. The economy is recovering quickly, and the immediate consequence is that too much money (from extremely cheap debt and accumulated savings built up over Covid) is chasing too few goods and services.

There are also labour shortages and supply chain difficulties in many sectors, which is constraining supply. A resurgence of inflation is the central scenario for growing numbers of businesses he says. By way of comparison, inflation in the USA is already at 4.7 per cent, up from 4.2 per cent for April, reflecting the overheating US economy. And the recovery, in both the USA or the UK, is nowhere near complete.

You can see where I’m going with this. Increased costs from Net Zero policy, combined with general inflationary pressures, looks like significant cost of living increases for ordinary people. Even with a growing economy, that will present real challenges to our well-earned reputation for economic management.

From a Net Zero perspective, then, how do we do the right thing and insulate ourselves against political attack at the same time? There should be three principles underlying our approach.

First, we need aggressively to embrace the long-term economic opportunities of getting to Net Zero by 2050, and we need to communicate that clearly so that people understand what this means for their day to day lives. Households living in energy poverty typically spend a higher proportion of their income on their energy bills. Improving the energy efficiency of dwellings by installing insulation, more efficient heating and cooling systems and more efficient building fabrics can decrease energy costs, and enable higher levels of disposable income.

Energy poverty also has a negative impact on the NHS, with more avoidable hospital admissions and use of non-primary health care services. Living in energy poverty increases the risk of acute respiratory, cardiovascular, and musculoskeletal problems, which often result in lengthy hospital admissions, particularly in winter. The Treasury is going to have to be brave and invest a lot of money up front.

Second, the cost impacts on the vast majority of voters must be minimal. If we try and force voters to retrofit their homes with new insulation, or install new low carbon boilers, at the personal cost of thousands of pounds, this will be a political disaster. Even for the voters who can afford significant expenditures, this will be seen as unfair and heavy-handed, and large numbers of them will either refuse (or be unable) to comply.

The third principle is this. We need to face down those who are starting to say that the costs of Net Zero are too much, or it is too difficult. In a world where countries are becoming more and not less committed to the need to limit global temperature rises, the UK cannot afford to hold back. The macro economic opportunities for reindustrialising huge parts of the North and Midlands – creating hundreds of thousands of jobs, whilst using the traditional strengths of the service economy in the South – is too great to ignore. We can not only be international leaders, but help the domestic economy go through a job rich transformation.

The debate how we reach Net Zero by 2050  will define our politics over the coming decades. We must ensure that we have an ambitious, world-leading approach that builds on our strengths. But we must also ensure that we don’t alienate voters along the way.

Henry Smith: Why marine protection can’t wait

8 Jun

Henry Smith is MP for Crawley. This is a sponsored post by Greenpeace.

Our environment is being degraded at an concerning rate, both on land and at sea. In the waters around our islands, destructive industrial fishing vessels spend thousands of hours each year operating in protected areas, damaging habitats, decimating fish populations and polluting our marine environment.

This is having a devastating, cumulative effect. Vital marine habitats like seagrass meadows, kelp forests and coral reefs are being damaged by bottom trawlers, while supertrawlers regularly descend onto UK waters to scoop up unimaginably vast quantities of marine life, harming the target fish populations, and undermining the entire marine ecosystem.

All of this is not only harming our oceans, it’s also harming our coastal communities and worsening the climate emergency facing all of us.

When bottom trawlers rip up patches of protected seabed, they aren’t only destroying important habitats, they’re also disturbing vast amounts of carbon which would otherwise be safely stored away in the seabed.

A recent landmark study in the journal Nature found that globally, carbon emissions from bottom trawling are equivalent to the carbon emissions of the entire global aviation industry. That’s a staggering statistic which gives you an idea of just how much carbon is potentially being released by bottom trawling. Estimated emissions from bottom trawling in UK waters are the fourth highest globally.

By delaying ocean protection, the UK government is jeopardising climate protection, but it’s not too late to change course. If we can properly protect our oceans from industrial fishing practices which are disturbing the vast carbon sinks that surround our islands, the oceans could become our best ally in the battle against climate change.

By properly protecting the waters around our islands, we can ensure that tens of millions of tonnes of carbon remain stored away safely in the seabed, and we can protect the natural processes which mean the oceans absorb excess carbon from the atmosphere remain intact and healthy, long into the future.

That’s why marine protection can’t wait. Every day that we delay, industrial fishing vessels continue to damage habitats and our “blue” carbon sinks.

Thankfully, our government has recognised that there is a problem, and has made a start towards remedying it. Plans are in motion to completely ban bottom trawling in two important protected areas, including the Dogger Bank, and partially ban bottom trawling in two further protected areas.

This is a good start, but the process has moved at too slow a pace. It’s been more than six months since the Government announced that it was considering new restrictions on bottom trawling in these protected areas, and still nothing has become a reality.

If the Government decides to follow this model across the entire network of protected areas, it could quite literally take years, if not decades, before all of the UK’s protected areas have adequate levels of protection from industrial fishing vessels. This would be fundamentally incompatible with the UK government’s own commitment to 30×30, 30 per cent of the world’s oceans being fully protected by 2030.

We simply cannot afford to wait that long.

However, there is a solution at hand, and one which this government has already used, but now seems to be ignoring – vessel licensing restrictions.

This power, provided for by the new post-Brexit Fisheries Act 2020, would allow us to outlaw the most destructive fishing vessels from our protected areas, by placing licence restrictions on them so they cannot operate in parts of UK waters that are supposed to be protected. This could also be used to ban fishing boats over a certain size, or over a certain capacity, from operating in protected areas, meaning it could also apply to supertrawlers.

This would speed up action significantly, and avoid the painfully slow process which the Dogger Bank bottom trawling restrictions are currently undergoing.

The scale of the problem is vast, almost all of our protected areas in offshore waters have no fishing restrictions in place, when they all should.

The good news is the Government is finally starting to recognise the problem. The next, and perhaps most important, step is to act with a sense of urgency that reflects the nature and climate emergencies now facing all of us, before it’s too late.

Clive Moffatt: The Government should come clean – and explain that reaching the net zero target by 2050 may not be possible

4 Jun

Clive Moffatt is an energy market analyst and former chairman of the UK Economic Security Group.

Back in April, the Government set the world’s most ambitious climate change target to reduce carbon emissions by 78 per cent by 2035 (compared to 1990 levels) with emissions targeted to fall to net-zero by 2050.

Cutting out coal from the electricity generation mix was the main reason why in 2020 the UK was able to slash emissions to a level 51 per cent below 1990 levels, but this had little economic impact and was only made possible by the existence of plentiful and cheap natural gas. The next stage will be far more difficult and costly.

Realising the targets will require nothing less than a complete overhaul of the energy network, the removal of natural gas from the energy mix – not to mention the plans to change dramatically how we move about and what we eat.

Looking at the energy sector alone, there are so many technological uncertainties that estimates of the costs of transition to zero vary considerably, with capital cost estimates alone ranging from £50 billion per annum for the next 30 years (Climate Change Committee) to £100 billion per annum (National Grid). Furthermore, the bulk of the costs in terms of consumer levies and/or taxation is likely to fall on those less able to pay.

What has been sadly missing from the debate so far is a clear and agreed set of policy guidelines and criteria to evaluate policy options and replace advocacy at any cost.

For a start, the UK cannot afford to go it alone and what we do should be based on what others do to meet the global challenge.

Second, there is no point transitioning to net zero if there is an increased risk of energy shortfalls – heat and light – and so the security of affordable supplies must be considered.

Third, the Government’s does not have a good record at picking technology winners and so the market must be allowed to deliver least-cost solutions.

Finally, natural gas supplies the bulk of our domestic heating and power requirements and will continue to have a critical role to play in the energy mix up to and beyond 2050.

On this basis, a slower but more secure and affordable route to net zero is possible and the following 10 action points could form the basis of a detailed policy framework to be announced in a white paper ahead of the next General Election in 2024 or earlier.

  1. A longer and more gradual rising CO2 price to underpin new investment in “green” energy and allow time for industry to become more energy efficient.
  2. Incentives eg tax rebates and/or subsidies to allow heavy industry to cut emissions – based on agreement at a sector or company level.
  3. Carbon equalisation tax on imports – to offset unfair competition to UK industry from imports from countries with less onerous emissions restrictions.
  4. No more nuclear fission after Hinkley C – the costs of large scale nuclear far outweigh the economic benefits in terms of both additional baseload capacity and emissions reduction.
  5. Cut wind capacity target from 40GW to 20 GW by 2040 to avoid incurring massive transmission constraints and system balancing costs associated with intermittency.
  6. To underpin baseload power security of supply, use capacity payments to support the construction of efficient CCGT capacity with potential for carbon capture but not imposed at the outset.
  7. Gas (without CCS), Demand Side Reduction (DSR) and batteries to compete in open cost/reliability based auction to deliver peak flexible supply at key points in the local distribution network.
  8. Evidence to date suggests that Carbon Capture and Storage (CCS) would increase power prices sharply, The Government should support prototypes pending a more detailed impact assessment.
  9. We will be reliant on imported natural gas for heat and power up to and beyond 2050. So we need to underpin new investment in flexible gas storage – currently less than two per cent of annual gas demand.
  10. Date for outlawing new gas domestic boilers to be no earlier than 2035 and dependent on a detailed welfare assessment of the reliable options available to replace natural gas.

Looking ahead to COP26 later this year, the UK and a very hesitant EU are the only ones among the world’s 18 largest greenhouse gas emitters to have submitted detail emission reduction plans.

So now would be good time for the Government to come clean and “tell it how it is”, namely that for very good reasons – such as technological constraints, security of supply, industrial competitiveness and especially affordability – reaching the net zero target by 2050 might not be possible.

Boris Johnson would be criticised for being a COP26 “party pooper”, but industry and consumers would probably breathe a sigh of relief.